The financial cost of mental health problems

David Goldbloom
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(Pictured: David Goldbloom)

Australia’s group insurers paid out at least $260 million in death and total and permanent disability claims due to psychological problems last year, according to SuperFriend, and the total financial loss from mental illness was at least 1.5 per cent of GDP, according to the National Mental Health Commission.

These figures and many more, alongside various referenced research papers from around the world, were presented to the SuperFriend symposium in Melbourne last week. About 150 super fund executives and corporate HR people attended the second annual event.

Damian Hill, the chief executive of REST and chair of SuperFriend, described the conference as taking the discussion to a new level.

Margo Lydon, SuperFriend chief executive, said the $260 million estimate of insurance claims associated with psychological problems was a conservative estimate. Because of the stigma associated with mental illness and for other reasons such as police not wanting to hurt relatives further by stating certain deaths were probably suicide, official figures are invariably understated.

Allan Fels, the chair of Australia’s Mental Health Commission, said that, for instance, the 1.5 per cent estimated cost to Australia’s GDP compared with higher estimates from Europe. He pointed to a survey of 4,000, of whom nine out of 10 said they would prefer to suffer in silence than talk to a colleague about mental illness. The same proportion thought stigma and discrimination would be reduced if it was treated like any other illness.

Fels, an economist and former chair of the ACCC and Prices Surveillance Authority, said GDP was a technical term: “it stands for Grossly Distorted Parameters”.

Fels is also a carer for someone who suffers from schizophrenia – his daughter Isabella. They appeared on the ABC’s ‘Australian Story’ in 2002 to discuss her illness and the impact it had on the family.

In fact, for a conference which was peppered with disturbing facts, there were a lot of wisecracks from the speakers, especially the keynote, Dr David Goldbloom, chair of Canada’s Mental Health Commission. Canada published its national standard for psychological health and safety early this year – a world first. “A working definition of a Canadian is ‘an unarmed American with healthcare’,” he said.

Canada was also addressing the stigma problem through an educational initiative known as “Open Minds”, which targets children’s perceptions. By the age of 10 most children would have already developed pejorative views about mental illness, Goldbloom said.

Canada also has a “peer support initiative” which includes peer accreditation standards “because we will never have enough mental health professionals”.

The Australian Commission signed a formal memorandum of understanding with the Canadian Commission early this year. Locally, the Mentally Healthy Workplace Alliance had been formed to work towards providing practical guides to employers and workplaces, Fels said. And a report by PwC had been commissioned to study the return on investment of a mentally healthy workforce. It was scheduled to be published next year.

Unlike most other lethal illnesses, psychological problems tend to first strike people when they are young and at their prime for productivity.

“OH&S (occupational health and safety) programs are largely built around steel-capped boots and hernia trusses,” Goldbloom said. But a study by the HR division of Towers Watson showed that the best companies for recognition of mental problems and support schemes to cope, had superior financials to other companies.

“The cost of not doing something about the problem in 2013 is untenable,” he said.

Many of the Canadian initiatives, including online resources, are available on the Commission’s website:

In Australia, the Victorian Government, through Worksafe Victoria and the Transport Accident Commission, and Monash University, this year produced a set of guidelines for organisations to help prevent mental health problems. It is accessible at:

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